Hamilton Jefferson disagreements

﻿Alexander Hamilton sought to shape the fiscal policies of the administration, so that it would favor the wealthier groups, who would in return lend the government monetary and political support. He urged Congress to assume the entire national debt, justifying it as a proper national obligation since the debt was incurred in the war for independence. As the capstone of his financial system, Hamilton proposed the idea of a bank of the U.S; more specifically, he proposed a powerful private institution of which the government was the major stockholder.

Jefferson, on the other hand, felt that the establishment of a bank by the government was unconstitutional. He felt that the power to charter banks rested in the hands of the states, not Congress. He refers to the Bill of Rights by saying that all powers not specifically granted to the central government were reserved to the states. Jefferson and his followers believed that the Constitution should be interpreted “literally” or “strictly”, what is known as the theory of “strict construction.”

Hamilton argued that what the Constitution didn’t forbid, it permitted. He invokes the clause of the Constitution that Congress may pass any laws “necessary and proper” to carry out the powers vested in the various government agencies. He argues that the government was explicitly empowered to collect taxes and regulate trade and in carrying out these basic functions, a national bank was both “proper” and “necessary.” Hamilton and his followers believed in a “loose” or “broad” interpretation of the Constitution, which evolved the theory of “loose construction” by invoking the “elastic clause” of the Constitution.

Jefferson and his followers felt that Hamilton’s financial schemes, including the suppression of the Whiskey Rebellion, were problematic for states’ rights. They felt that the states were being overshadowed by a federal colossus and so Jefferson and Madison organized their opposition to the Hamiltonian program,...

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